In San Francisco, Rooms for $1,000/Month Are Now Scarce

Lexie Scanlon doesn’t fit the profile of young tech workers looking to share houses. But she can’t afford anywhere else to live in the city. (Sam Harnett/KQED)

If you can’t afford at least $1,000 in rent, then it may be difficult to find anywhere to live in San Francisco — even just a room. The average market rate per room on new leases has now gone well above $1,000 per month. Spots in shared-living situations with rent-controlled leases that make prices lower are few and coveted. And even some privately run single-room-occupancies (SRO), often a last resort before homelessness, are now charging $1,000 in rent for a room that doesn’t even have its own bathroom or kitchen.

Bedrooms for under $1,000 a month can still be found on the fringes of some less popular neighborhoods or with students near San Francisco State. But the only way to get a spot in one of the city’s trendier neighborhoods for that price is to convince a master tenant with a rent-controlled lease to let you move in. For these spots, applicants compete against dozens or, in some cases, hundreds of other candidates.

Getting selected to sublet a room in a shared-living situation depends on the whims of the leaseholders. Applicants send tailored cover letters, fight to win attention at open houses, and attempt to impress potential housemates during one-on-one interviews. The whole thing is a subjective process with little protection against prejudices like ageism, sexism or racism. If the master tenant doesn’t like you, you won’t get picked.

To beat the competition and get a hotly coveted room, applicants are trying anything they can. Some advertise themselves on Craigslist as great roommates. Others send LinkedIn and Facebook profiles. Francesco Mursia made a video introducing himself and describing his favorite pastimes. He is not getting many responses.

Mursia thinks part of the problem is his age. Many of the other applicants are 20-somethings in a period of transition. Mursia is 39. He would like to live alone, but with his budget ($1,000/month) that’s not possible in San Francisco. He’s been looking for a room since September. He checks Craigslist every day, sends out emails and goes to open houses. During this process, he said, “You ask yourself, why don’t I stand out?”

Even expensive rooms are highly contested. Eun-Joung Lee lives in a three-bedroom on the border between the Mission and Noe Valley. She recently put a room on Craigslist for $1,500 a month. That may sound like a lot, but according to Tracy Ballard from the Bay Area Rental Advisors, the average asking rate for a three-bedroom in San Francisco is around $5,000/month.

So, $1,500 for a room in a hot neighborhood isn’t that bad. Lee got 20 responses to her post, which suggests she could have probably priced the room even higher.

The standard financial advice is to not spend more than a third of your income on rent. For a $1,500 a month room you would need to earn $54,000 a year after taxes. Lexie Scanlon barely makes half that as an hourly employee. She says she cannot find anywhere affordable in the city to live, so she is considering an SRO.

Scanlon has lived in an SRO before. It was not a pleasant arrangement. The place had bedbugs, she said, but at least it was affordable — only $185 a week. She recently called to inquire about a room at the same place, and the price had gone up to $225 a week. But, $900 a month is too much to pay for those conditions, she said.

Scanlon has seen a few shared-living situations she can afford — mostly student houses or apartments that advertise themselves as “tech houses.” These places post on Craigslist as group living arrangements for people with startup ambitions. One such post was titled “the good life 2.0.”

Another reads: “We all went to top schools and work at the companies you read about.” Scanlon doesn’t fit that profile. She is 42 years old, transgender and a veteran. She works in the city and wants to know why there isn’t a place for her here.

Brian Harrigan is on the other side of the equation. He is on the lease of an iconic four-bedroom Victorian in the Lower Haight. He could probably rent the rooms out for as much as $1,500 each, but he doesn’t want to be greedy. At the same time, he said, “If I was to rent it out at like $500 I would have hundreds of emails. You would get everyone applying for it, and it wouldn’t be manageable.”

Harrigan recently had a room open up in the apartment and he decided to put it up at $1,000 — about double the rent-controlled rate and $500 below what he could have charged. Even with the inflated price, he received about 50 applications for the one room. The odds of getting selected from that pool are worse than obtaining undergraduate admission at Harvard.

Getting an affordable room has not always been so cutthroat. Twenty years ago, John Hattori paid $70 a month to rent on Valencia Street in the Mission. Today he lives in a rent-controlled apartment, which he can afford as a video artist and substitute teacher. “The type of people that moved when I moved here are very different people, and that’s an unfortunate thing. You can’t experiment with your life in the same way that we were able to,” he said.

It sounds like Brian Harrigan just admitted to overcharging for a room, which is illegal. I can’t believe that wasn’t mentioned in the article. Do not make it sound like what he is doing is okay, or even in compliance with the law: http://www.sfrb.org/index.aspx?page=1043

scelerat

It’s not necessarily illegal. If Harrington is paying $1500 in rent, he can charge a subtenant up to that amount. The *total* amount that subtenants pay the master tenant can’t exceed the total rent, that’s all.

A previous flatmate of mine did this; he was the master tenant and was paying $1600 a month but charged his two sublets (including me) enough that he personally lived rent free. Personally I was okay with this. He was an artist who’d been in the apartment for 25 years. He payed out the wazoo on commercial space in SOMA, which is not so regulated, and was eventually forced to move his studio to Oakland.

Harrington could easily be doing the same thing, and be legally in the clear. Morally too, imo.

Megan

No, check out the second paragraph of the link I posted. He cannot do this.

herblelecti

Nothing about it is immoral. It’s no different than buying a collectible item, or a scarce ticket, or anything else then later selling it at a profit. In fact, it’s even MORE okay than the examples I gave because the subtenants are getting rooms at below market value. If the person who has lived there the longest is able to live rent-free, or even make a profit, then more power to him.

Megan

It is illegal and it is immoral.

herblelecti

Why do you consider it immoral?

Luckyinrent

But read the law. It isn’t illegal, so long as the person renting isn’t being charged more than the total rent owed to the landlord. There is a clause for ‘splitting’ the rent, but that can be done through a variety of different means and doesn’t not automatically equal ‘half’. In addition, other considerations come into play such as amount of space used, amenities provided, etc, which theoretically can add up to a subletter paying the whole of a master tennants lease. As for the morality of the issue, consider this…I have lived in my apartment for 10 years now. I have a great, rent controlled, 3 bedroom apartment in the Castro for which I pay $1800 a month. I know that if someone is looking for an apartment in the same neighborhood they are looking at at least twice that and generally more. Rooms in the neighborhood are going for 1500 or above. So I’m giving someone access to my entire home, plus providing furniture, water, electricity, and other things, but it’s morally wrong of me to charge anything more than $900? I’m sorry, but you are wrong.

http://thetenssf.tumblr.com thetens

It’s totally illegal. What you are talking about only applies if the master tenant does not live in the apartment.

luckyinrent

Not according to the rent board. I’ve been very careful with what I do and do not charge for rent.

Geotron VonDoja

It’s not immoral. At best, it’s legal, at worst illegal (which I don’t think it is). All herblelecti stated, is that he and the other roommate were subsidizing the rent of an old artist and substitute teacher so that he lived rent free as the master tenant. Isn’t that EXACTLY what everyone in SF wants? To have their rent subsidized by everyone else via rent control and higher taxes? Because that’s exactly what happened. So you in effect are contradicting your own position.

jeffp

Not sure you understand the concept of rent control. Taxpayers don’t make up the difference between controlled rent and market value.

Geotron VonDoja

Actually, in effect they do. Let me explain: The law prevents a landlord from arbitrarily raising a tenants rent and “pricing them out” as it were. However, the law therefore also requires that the same landlord “price them in” by keeping the rent the same over time. This net effect is basically a landlord “subsidizing” a tenants inability to pay the current market rate, and that subsidy comes in the form of potential (paper) income losses to the landlord, and there is no tax deduction for that. All the while, the cost of renting to the landlord (insurance, improvements, repairs, property taxes) are ever increasing, further compounding their (actual) income losses. Most people over time tend to make more year-over-year than they did before, so their rent is “stable” but their income has increased. I’ve met and known people who moved to SF in the mid-late 90’s (as students), got rent control and stayed (who wouldn’t), but currently work in tech making six-figure salaries. So all recent renters/taxpayers who are paying market rate, including the landlord, are subsidizing the old rent controlled tenant, even though they may be now in a position to pay said market rate. So to the next student who moves here and can’t find rent control, it’s because some guy who’s had it forever refuses to give it up even though he can clearly afford to pay more now. Which then means we are collectively “subsidizing” the lower rent of someone who is now considered “wealthy”.

I agree the various links you and others have provided seem to make it clear that proportionality is a legal requirement for subtenant rent.

It remains unclear to me why, given an upper bound total of the rent-controlled rate, a master tenant should not be able to have subtenants pay whatever he or she pleases. Especially in an inflated housing market, allowing the master tenant to set an arbitrary rate seems to be a win-win situation for the master tenant and the subtenant, and the landlord remains unaffected.

There seems to be a whiff of the notion that the master tenant should not be able to profit off of his or her tenancy, but again, given already established boundaries, why not? I fail to see how that is immoral.

Can anyone give a reasonable argument why the master tenant should not be able to set whatever rate he or she wants, as long as the amount is equal to or less than the rent-controlled cap?

samroni

Without going too far into Economics 101 here, it’s because this extra layer of tenancy distorts fair market prices for housing in SF. If the master tenant were not able to otherwise afford his room, he would move elsewhere sooner. Instead, he pays next to nothing (or nothing) and occupies housing supply that someone else would have readily consumed for market prices. This lowers the actual market supply, and therefore raises ALL housing prices.

In effect, the master tenant paying $0 for rent is not just being subsidized by the sub-tenants, he is being subsidized by the entire housing market where prices no longer properly reflect true housing supply.

If you dig deeper, I think you’ll find that skyrocketing rent prices in SF are as much a result of rent control as they are techies with six-figure incomes. Ditch rent control and I’d wager rent prices would drop dramatically within a matter of months as insolvent housing supply occupied since the 70’s and 80’s returns to market.

No comment on whether this is the right move for SF culturally…just sayin’.

scelerat

It sounds like you’re making an argument against rent control, which is a different issue.

GIVEN the existence of rent control, why shouldn’t the master tenant be able to ask whatever he wants, up to the total rent, of his subtenants? It doesn’t reduce supply. At worst the master tenant prices the available room out of reach of any subtenant. In which case if they want to sublet the room they must reduce the price to market values.

“Culturally” speaking, or at least in terms of old vs new residents, allowing a master tenant to set an arbitrary and possibly profitable rate would mean that many older residents could get some extra income to make it in an increasingly expensive city, while staying in that city and contributing to that culture.

If proportionality was allowed by law, it might make the difference between an older resident staying, because they have a valuable potentially profitable property. Then master tenants would have a stake in a boom economy.

Enforcing proportionality means there is less of an incentive to take a roommate. Not none, just less. So I would think that enforcing proportionality for subrenters would attenuate supply somewhat.

WillySF

It would price many workers out of the city where they work. Ditching rent control is not the answer.

Nowhere in this article does it state what he pays per month or if it is rent controlled.

Megan

It’s pretty clear that he was wavering between charging between $500 and $1500 for the room but didn’t go with the lower rate because he would have been bombarded with applicants. Whether it is rent controlled or not the rent on the apartment does not fluctuate month by month and the article even admits that the rate is “inflated”.

jeffp

The excuse of not wanting to be bombarded with applicants is a complete cop-out. Just put aside the first 20 responses, delete the rest and take down the ad. Have the responses sent to an old email account. Have them sent to a special folder. The possibilities are endless. But hey, whatever makes him feel better about doubling the rent. (At least he didn’t triple it! He could have, you know!)

one-off

um- it is illegal for the master tenant to charge “market rate” on an apartment whose total rent is far below market rate. They have to charge a percentage of the total rent based on square footage per room. A good friend of mine found out the primary lease holder was gauging him, took her to court, won, and garnished her wages.

SFLove

Absolutely true! And it is often not necessary to go to court, the SF Rent Board can adjudicate between master and sub tenants.

Carlos Nieto

Then dont rent to snitches.

Mangos

It is absolutely not based solely on square footage – you and everyone else who claims so in this discussion are incorrect. From the housing code:

“The allowable proportional share of total rent may be calculated based on equal division among occupants, or the square footage shared with and/or occupied exclusively by the subtenant, or any other method that allocates the rent such that the subtenant pays no more to the master tenant than the master tenant pays to the landlord for the subtenant’s housing and housing services. In determining the proper base rent, additional housing services provided by the master tenant (such as furnishings or utilities) and/or any special obligations of the master tenant and/or evidence of the relative amenities or value of rooms, may be considered.”

I am a master tenant who has, until now, never charged more than an exact proportion for each of the three bedrooms in my flat. However I now keep one bedroom empty as a spare bedroom, so there are only two full-time occupants. I have one roommate moving out soon (she pays the traditional 1/3), but you bet your butt the next person will pay 1/2 the total. I’m fine with that, it’s not illegal nor immoral, and it’s STILL a bargain for the city, especially based on the flat and the location.

Chuck

Keeping one bedroom off the market deprives those in need of an affordable housing unit. Charging the next one half is just rent gouging.

StarvingArtist

Had two rooms open up at the rent-controlled apt I live in in the last 6 months. We posted on craigslist and within 2 hrs had over 100 emails and took the ad down. It is nice to have an impact though as we made sure not to offer to tech people who make a lot of money and work in SV, even though the tech buses stop right outside our window. Feels good to have a tiny bit of power, although it may not last.

Michael

oh golly gee – good for you to be prejudice against people based soley on their occupation. Definitely not renting to that starving artist next time. Too risky they’ll squat and never leave.

StarvingArtist

Haha right. The room is 700 a month, why would we rent that to someone who makes 6 figures and feels like slummin it? Go back to your condo.

JayDeeh

This has gone beyond ridiculous. When I moved to San Francisco in the late mid 90’s, it was possible for someone to make it on a fair income. My generation worked as office temps, barristas, waitstaff, and just about any job we could find. It left time for creative pursuits – and such. Hell we could even afford to eat out and have a drink on the weekend. But things changed – and now the average young person either has to a) have a really well paid start-up job or b) work several jobs just to make rent. I’m not against hard work – but a city where %60 plus of your income goes to rent, just isn’t sustainable. I lived through the previous dotcom boom, but this is something really different. I’m not sure what shape it’s going to leave the city in.

Tuesday

What these people who are charging a huge price fail to realize that charging more than fair share is illegal in SF. You can not charge someone more than proportional value. Of all bedrooms are the same the rent must be split equally among tenants. Most of these pole are charging ome than the fair share and the tenant is actually paying the whole or most of the rent so these scumbags can live for free. It’s happened to me twice and I went to the rent board both times and won the case. The reason they get away with it is because no enough people know this and will take the case to court.

chrisfs

If I understand right, I think a big reason people don’t do this is that they would be taking the people in the same house to court. How was the interaction between your master tenant and you after you won your case ? Or did you simply have to move again ?

Bob Strong

That seems really pricy for just one room. My family and I are considering moving to San Francisco with my job. That would definitely be well outside our budget on a per room scale. http://www.wiebesmoving.com

Sanfordia113

FAIL! Sam Harnett, you neglected to identify Brian Harrigan as breaking the law and being subject to damages if his new tenant takes hime to court before the Rent Board. Subletting a rent-controlled apartment is not allowed to produce “profit.” Doing so imposes legal liability to the master tenant, including punitive penalties and legal costs. If he provides a fully “furnished” apartment, he could charge up to $200/month extra, but that is it. I hope this scam artist gets his butt sued.

JoanCrawford1

The bubble will burst – it always does. People should start building up a “poor” city and turn it into something magical. SF has too much – greedy little city. Detroit or bust!

John G.

As has already been pointed out, the SF Rent Control Ordinance prohibits master tenants from charging more than a proportional amount for the space being rented. I see practically every post says the same thing. Long time SF residents are aware of this rule–I guess the newcomers are not.

One thing that apartment hunters should be aware of: there are some residents out there who will advertise a room for rent, hold an open house and collect a $20 credit check fee from several hundred people without any intention of ever renting the room out.

BayAreaNative82

In this tiny, expensive (for a long time now) city, it
seems for some master tenants a rent controlled lease becomes their lease
on life (in San Francisco). For most master tenants this is, as
close to home ownership, or a sense of financial stability, they will ever have
in San Francisco, or anywhere maybe.

Since the late 90’s/ early 2000’s I’ve paid between a
few hundred bucks “over my share” (section 6.14 sf rent control board) and upwards of 3x the ENTIRE rent of
some units, even as a bay area native aware of sub- and co- tenants
rights.

I was both a co-tenant and sub-tenant when over paying, begrudgingly
knowing, or becoming aware over time, that my master tenants were generating
income from my rent. Were we roommates? We called each other that. The
dynamic however isn’t really a roommate dynamic.

What ever you call it, my experience of the painful
dialectical dynamic between master-tenants and sub-/co-tenants was for me soul
crushing. All of my master tenants were: close friends of close friends, 1-2
degrees of separation friends, friends of family members, and a few strangers,
whom I got to know well, who picked me and my eager smile from their thick
stacks of applicants.

I paid rates I knew were illegal because I had bad credit, little
savings, poor financial skills, student loan debt for a still unfinished
degree, am transgender, struggle with my mental and physical health and the
costs related to that, and not really realizing how deeply I was in
survival mode. I just knew I needed and desired to be near my friends
and my low paying non-profit work, muni, and caltrain to visit my
aging parents, and close to my health providers so I could manage to show up
for appointments, nearly on time.

As a sub/co tenant over paying, I also participated in gentrifying
the Mission, and Hayes Valley, all the while going to anti gentrification
rallies, learning the names of neighbors and small shopkeepers
who’d been in their homes or store fronts for decades, and then
forgetting them because I had to move so often and smoked a lot of herb.
I enjoyed drinking and smoking, lingering, and “doing it” in the
bushes at Dolores and other parks, and was also actively supportive of
legislation passed by youth activists limiting the number of cigarette and
alcohol sales permits in areas already dense with tobacco and liquor stores,
and banning smoking and drinking in public park.

If I were to find myself in the position of being a master
tenant in SF with a rent controlled unit, and some additional rooms to rent,
and living on the limited budget I have and that remaining student loan debt, I
too could see myself sliding down the slippery slope of generating income from
sub/co-tenants. Its another dynamic of divide and conquer amongst the
renting/working/middle class, its sad, its not rare, its not simple, far from
fair or just, and painful.

I moved away though. Almost four years ago. Homesick, but hearing about how
home is, makes me sick too.

Carlos Nieto

I should have bough real estate in Frisco. I would have loved to turn down Googlites. And the for those working in small shoppes, regardless of market rates, I would only charge 1/3 of what they make.

Tim Bracken

Just a reminder for everyone that a master tenant (i.e. the one whose name is on the lease) cannot charges sub-tenants (i.e. the rest of you renting a room in the place) more money than the total amount due under the lease. If this happens, the sub-tenants can go to the Rent Board to get the overpayment back from the master tenant.

Master tenants are also prohibited from forcing the sub-tenants to pay a disproportionate share of the total rent. For example, if the master tenant lives in a rent-controlled space, he or she might be tempted to contribute $1/month in rent, while passing along the remaining cost to the sub-tenants, who see it as a bargain in this rental market. That would be illegal too.

A good reason to build up… we can still build up and ask it to have the same SF charm/architecture.

Author

Sam Harnett

Sam Harnett is a producer and reporter who contributes regularly to KQED News, The California Report, Marketplace, and The World. He is the creator of Driving With Strangers, a podcast of stories told to a rideshare driver; and a co-founder of Blocsocks, an initiative to help Bulgarian women sell their wool goods abroad.